Manitowoc reports Net Sales of $329.2
million; Adjusted EBITDA(1) of $16.3 million
The Manitowoc Company, Inc. (NYSE: MTW), (the “Company” or
“Manitowoc”) a leading global manufacturer of cranes and lifting
solutions, today reported a first-quarter net loss of $7.8 million,
or $0.22 per diluted share. First-quarter adjusted net loss(1) of
$6.3 million, or $0.18 per diluted share, declined $9.0 million
year-over-year. First-quarter adjusted net loss included $4.0
million of other expense – net, or $0.11 per diluted share,
primarily related to foreign currency losses. The Company also
reported net sales of $329.2 million and adjusted EBITDA(1) of
$16.3 million, or 5.0% of sales.
First-quarter orders of $375.0 million declined 15.0% from the
prior year. Orders were unfavorably impacted by approximately $5.1
million due to changes in foreign currency exchange rates. Backlog
as of March 31, 2020 totaled $520.9 million.
As of March 31, 2020, the Company had total liquidity of $382.0
million, including $103.6 million of cash, $244.2 million of
borrowing capacity on its Asset Based Lending revolving credit
facility and $38.2 million of availability on its non-committed
European overdraft lines. During the quarter, the Company did not
borrow on its Asset Based Lending revolving credit facility.
“Our first-quarter adjusted EBITDA of $16.3 million was in line
with our planned expectations, despite the unprecedented conditions
created by the COVID-19 pandemic. This was made possible by the
extraordinary commitment of our talented and resolute team. During
this pandemic, our primary goal remains unchanged, ensuring the
safety, health and well-being of all our employees, their families,
our suppliers and customers. Our dedicated teams are working hard
to deliver cranes and provide essential parts and services, and I
could not be prouder of their commitment to our high standards
while balancing personal challenges. We are grateful for the
efforts our healthcare providers and first responders are making,
and we are proud to support these front-line professionals by
committing $100,000 from The Manitowoc Company Foundation in the
fight against COVID-19,” commented Barry L. Pennypacker, President
and Chief Executive Officer of The Manitowoc Company, Inc.
“While we have remained operational in the U.S., our major
facilities in Europe began closing in mid-March which delayed our
ability to ship products. It is unclear how events unfold from
here, however with ample liquidity and no significant debt
maturities until 2026 we are well positioned to weather
circumstances like this crisis. We continue to analyze all of our
costs and take appropriate actions. We have substantially cut
discretionary spending, while eliminating salary increases across
the enterprise, including executives and board members. Furloughs,
as well as temporary plant shutdowns, are also being planned based
upon our order rates. In order to proactively manage our liquidity,
we are significantly cutting our capital spending this year as well
as suspending our share buyback program. Manitowoc entered this
uncertain period as a more agile company and market leader with a
strong balance sheet, and I am confident that we will emerge
stronger when end markets successfully recover,” concluded
Pennypacker.
2020 Outlook
Due to uncertainty related to the COVID-19 pandemic, the Company
withdrew guidance on March 27, 2020 and is not providing a
financial outlook for 2020 at this time. While Manitowoc, its
suppliers and customers operations have begun to resume activity,
the Company does expect a significant impact to its second quarter
and full year results due to the magnitude of supply chain and
business disruptions. For now, the Company anticipates weaker
demand levels to continue in the near term. In response to these
challenges, the Company has reduced its production levels and
initiated a set of cost reduction actions and will continue to
closely monitor market conditions and adjust its plans
accordingly.
Investor Conference Call
On Friday, May 8th, 2020, at 10:00 a.m. ET (9:00 a.m. CT), The
Manitowoc Company’s senior management will discuss its
first-quarter 2020 earnings results during a live conference call
for security analysts and institutional investors. A live audio
webcast of the call, along with the related presentation, published
in conjunction with this press release, can be accessed in the
Investor Relations section of Manitowoc’s website at
www.manitowoc.com. A replay of the conference call will also be
available at the same location on the website.
About The Manitowoc Company, Inc.
The Manitowoc Company, Inc. was founded in 1902 and has over a
117-year tradition of providing high-quality, customer-focused
products and support services to its markets. Manitowoc is one of
the world's leading providers of engineered lifting solutions.
Manitowoc, through its wholly-owned subsidiaries, designs,
manufactures, markets, and supports comprehensive product lines of
mobile telescopic cranes, tower cranes, lattice-boom crawler cranes
and boom trucks under the Grove, Manitowoc, National Crane, Potain,
Shuttlelift and Manitowoc Crane Care brand names.
Footnote
(1)Adjusted net income (loss), diluted adjusted net income
(loss) per share, adjusted EBITDA, adjusted operating cash flows
and free cash flows are financial measures that are not in
accordance with GAAP. For a reconciliation to the comparable GAAP
numbers please see schedule of “Non-GAAP Financial Measures” at the
end of this press release. Manitowoc believes these non-GAAP
financial measures provide important supplemental information to
both management and investors regarding financial and business
trends used in assessing its results of operations. Manitowoc
believes excluding specified items provides a more meaningful
comparison to the corresponding reporting periods and internal
budgets and forecasts, assists investors in performing analysis
that is consistent with financial models developed by investors and
research analysts, provides management with a more relevant measure
of operating performance and is more useful in assessing management
performance.
Forward-looking Statements
This press release includes “forward-looking statements”
intended to qualify for the safe harbor from liability under the
Private Securities Litigation Reform Act of 1995. Any statements
contained in this press release that are not historical facts are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are
based on the current expectations of the management of the Company
and are subject to uncertainty and changes in circumstances.
Forward-looking statements include, without limitation, statements
typically containing words such as “intends,” “expects,”
“anticipates,” “targets,” “estimates,” and words of similar import.
By their nature, forward-looking statements are not guarantees of
future performance or results and involve risks and uncertainties
because they relate to events and depend on circumstances that will
occur in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking statements. Factors
that could cause actual results and developments to differ
materially include, among others:
- The uncertain negative impacts COVID-19 will have on our
business, financial condition, cash flows, results of operations
and supply chain, as well as customer demand;
- actions of competitors;
- changes in economic or industry conditions generally or in the
markets served by Manitowoc;
- unanticipated changes in customer demand, including changes in
global demand for high-capacity lifting equipment, changes in
demand for lifting equipment in emerging economies, and changes in
demand for used lifting equipment;
- geographic factors and political and economic conditions and
risks;
- the ability to capitalize on key strategic opportunities and
the ability to implement Manitowoc’s long-term initiatives;
- government approval and funding of projects and the effect of
government-related issues or developments;
- unanticipated changes in the capital and financial
markets;
- unanticipated changes in revenues, margins and costs;
- the ability to increase operational efficiencies across
Manitowoc and to capitalize on those efficiencies;
- the ability to significantly improve profitability; and
- risks and factors detailed in Manitowoc's 2019 Annual Report on
Form 10-K and its other filings with the United States Securities
and Exchange Commission.
Manitowoc undertakes no obligation to update or revise
forward-looking statements, whether as a result of new information,
future events, or otherwise. Forward-looking statements only speak
as of the date on which they are made. Information on the potential
factors that could affect the Company's actual results of
operations is included in its filings with the Securities and
Exchange Commission, including but not limited to its Annual Report
on Form 10-K for the fiscal year ended December 31, 2019.
THE MANITOWOC COMPANY,
INC.
Unaudited Consolidated
Financial Information
For the three months ended March
31, 2020 and 2019
(In millions, except per share
and share amounts)
CONSOLIDATED STATEMENT OF
OPERATIONS
Three Months Ended
March 31,
2020
2019
Net sales
$
329.2
$
418.0
Cost of sales
266.0
337.8
Gross profit
63.2
80.2
Operating costs and expenses:
Engineering, selling and administrative
expenses
55.9
59.4
Amortization of intangible assets
0.1
0.1
Restructuring expense
1.5
4.5
Total operating costs and expenses
57.5
64.0
Operating income
5.7
16.2
Other expense:
Interest expense
(7.2
)
(10.9
)
Amortization of deferred financing
fees
(0.4
)
(0.4
)
Loss on debt extinguishment
—
(25.0
)
Other expense - net
(4.0
)
(3.3
)
Total other expense
(11.6
)
(39.6
)
Loss before income taxes
(5.9
)
(23.4
)
Provision for income taxes
1.9
3.3
Net loss
$
(7.8
)
$
(26.7
)
Per Share Data
Basic net loss per common share
$
(0.22
)
$
(0.75
)
Diluted net loss per common share
$
(0.22
)
$
(0.75
)
Weighted average shares outstanding -
basic
35,135,525
35,642,832
Weighted average shares outstanding -
diluted
35,135,525
35,642,832
THE MANITOWOC COMPANY,
INC.
Unaudited Consolidated
Financial Information
As of March 31, 2020 and December
31, 2019
(In millions, except share
amounts)
CONSOLIDATED BALANCE SHEETS
March 31,
2020
December 31,
2019
Assets
Current Assets:
Cash and cash equivalents
$
103.6
$
199.3
Accounts receivable, less allowances of
$8.7 and $7.9, respectively
169.3
168.3
Inventories — net
545.6
461.4
Notes receivable — net
15.1
17.4
Other current assets
29.2
26.0
Total current assets
862.8
872.4
Property, plant and equipment — net
277.6
289.9
Operating lease right-of-use assets
44.9
47.6
Goodwill
230.3
232.5
Other intangible assets — net
114.9
116.3
Other long-term assets
53.5
59.0
Total assets
$
1,584.0
$
1,617.7
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable and accrued expenses
$
358.4
$
340.8
Short-term borrowings and current portion
of long-term debt
3.9
3.8
Product warranties
47.1
47.2
Customer advances
21.0
25.8
Other liabilities
21.5
23.3
Total current liabilities
451.9
440.9
Non-Current Liabilities:
Long-term debt
307.9
308.4
Operating lease liabilities
35.0
37.6
Deferred income taxes
3.2
5.5
Pension obligations
83.7
86.4
Postretirement health and other benefit
obligations
15.8
16.4
Long-term deferred revenue
25.7
30.3
Other non-current liabilities
44.1
46.3
Total non-current liabilities
515.4
530.9
Stockholders' Equity:
Preferred stock (authorized 3,500,000
shares of $.01 par value;
none outstanding)
—
—
Common stock (75,000,000 shares
authorized, 40,793,983 shares issued, 34,508,504
and 35,374,537 shares outstanding,
respectively)
0.4
0.4
Additional paid-in capital
593.7
592.2
Accumulated other comprehensive loss
(133.4
)
(121.0
)
Retained earnings
228.2
236.2
Treasury stock, at cost (6,285,479 and
5,419,446 shares, respectively)
(72.2
)
(61.9
)
Total stockholders' equity
616.7
645.9
Total liabilities and stockholders'
equity
$
1,584.0
$
1,617.7
THE MANITOWOC COMPANY,
INC.
Unaudited Consolidated
Financial Information
For the three months ended March
31, 2020 and 2019
(In millions)
CONSOLIDATED STATEMENT OF CASH
FLOWS
Three Months Ended
March 31,
2020
2019
Cash Flows from Operating
Activities:
Net loss
$
(7.8
)
$
(26.7
)
Adjustments to reconcile net loss to cash
used for operating activities:
Depreciation
9.0
8.8
Amortization of intangible assets
0.1
0.1
Amortization of deferred financing
fees
0.4
0.4
Loss on debt extinguishment
—
25.0
(Gain) loss on sale of property, plant and
equipment
(0.1
)
0.4
Other
3.4
3.7
Changes in operating assets and
liabilities
Accounts receivable
(5.6
)
(195.7
)
Inventories
(88.5
)
(94.5
)
Notes receivable
2.6
—
Other assets
(1.7
)
14.1
Accounts payable
28.1
26.6
Accrued expenses and other liabilities
(18.5
)
(29.5
)
Net cash used for operating activities
(78.6
)
(267.3
)
Cash Flows from Investing
Activities:
Capital expenditures
(3.6
)
(4.4
)
Proceeds from sale of fixed assets
0.1
4.8
Cash receipts on sold accounts
receivable
—
126.3
Net cash provided by (used for) investing
activities
(3.5
)
126.7
Cash Flows from Financing
Activities:
Proceeds from revolving credit
facility
—
58.0
Payments on revolving credit facility
—
(25.0
)
Payments on long-term debt
—
(277.8
)
Proceeds from long-term debt
—
300.0
Other debt - net
(0.5
)
—
Debt issuance costs
—
(5.6
)
Exercises of stock options
0.1
0.1
Common stock repurchases
(12.0
)
—
Net cash provided by (used for) financing
activities
(12.4
)
49.7
Effect of exchange rate changes on
cash
(1.3
)
(0.4
)
Net decrease in cash and cash
equivalents
(95.8
)
(91.3
)
Cash and cash equivalents at beginning of
period
199.3
140.3
Cash and cash equivalents at end of
period
$
103.6
$
49.0
Non-GAAP Financial Measures
Non-GAAP Items
Adjusted net income (loss), diluted adjusted net income (loss)
per share, adjusted EBITDA, adjusted operating cash flows and free
cash flows are financial measures that are not in accordance with
GAAP. Manitowoc believes these non-GAAP financial measures provide
important supplemental information to both management and investors
regarding financial and business trends used in assessing its
results of operations. Manitowoc believes excluding specified items
provides a more meaningful comparison to the corresponding
reporting periods and internal budgets and forecasts, assists
investors in performing analysis that is consistent with financial
models developed by investors and research analysts, provides
management with a more relevant measure of operating performance
and is more useful in assessing management performance.
Reconciliation of Adjusted Net Income
(Loss) to Net Income (Loss)
(in millions, except per share
amounts)
Three Months Ended
March 31,
2020
2019
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit
$
63.2
$
—
$
63.2
$
80.2
$
—
$
80.2
Engineering, selling and administrative
expenses
(55.9
)
—
(55.9
)
(59.4
)
—
(59.4
)
Amortization of intangible assets
(0.1
)
—
(0.1
)
(0.1
)
—
(0.1
)
Restructuring expense (1)
(1.5
)
1.5
—
(4.5
)
4.5
—
Operating income
5.7
1.5
7.2
16.2
4.5
20.7
Interest expense
(7.2
)
—
(7.2
)
(10.9
)
—
(10.9
)
Amortization of deferred financing
fees
(0.4
)
—
(0.4
)
(0.4
)
—
(0.4
)
Loss on debt extinguishment (2)
—
—
—
(25.0
)
25.0
—
Other expense - net
(4.0
)
—
(4.0
)
(3.3
)
—
(3.3
)
Income (loss) before income
taxes
$
(5.9
)
$
1.5
$
(4.4
)
$
(23.4
)
$
29.5
$
6.1
Provision for income taxes (3)
(1.9
)
—
(1.9
)
(3.3
)
(0.1
)
(3.4
)
Net income (loss)
$
(7.8
)
$
1.5
$
(6.3
)
$
(26.7
)
$
29.4
$
2.7
Diluted net income (loss) per share
$
(0.22
)
$
(0.18
)
$
(0.75
)
$
0.08
(1)
The adjustment in 2020 and 2019 represents
the add back of restructuring related charges.
(2)
The adjustment in 2019 represents the
removal of charges related to the Company’s refinancing of its
Asset Based Lending Revolving Credit Facility and senior secured
second lien notes.
(3)
The adjustment in 2019 represent the
income tax impacts of items (1) and (2).
Adjusted Operating Cash Flows and Free Cash Flows
(In millions)
Three Months Ended
March 31,
2020
2019
Net cash used for operating activities
$
(78.6
)
$
(267.3
)
Cash receipts on sold accounts
receivable
—
126.3
Net payments on accounts receivable
securitization program
—
75.0
Adjusted operating cash flows
(78.6
)
(66.0
)
Capital expenditures
(3.6
)
(4.4
)
Free cash flows
$
(82.2
)
$
(70.4
)
Adjusted EBITDA and Adjusted Operating Income
The Company defines adjusted EBITDA as net income (loss) before
interest, income taxes, depreciation and amortization, plus an
addback of restructuring and certain other charges. The
reconciliation of net income (loss) to adjusted EBITDA and
operating income to adjusted operating income for the three months
ended March 31, 2020 and 2019, is as follows (in millions):
Three Months Ended
March 31,
Trailing Twelve
2020
2019
Months
Net income (loss)
$
(7.8
)
$
(26.7
)
$
65.5
Interest expense and amortization of
deferred financing fees
7.6
11.3
30.5
Provision for income taxes
1.9
3.3
11.0
Depreciation expense
9.0
8.8
35.2
Amortization of intangible assets
0.1
0.1
0.3
EBITDA
10.8
(3.2
)
142.5
Restructuring expense
1.5
4.5
6.8
Loss on debt extinguishment
—
25.0
—
Other non-recurring charges (1)
—
—
3.1
Other (income) expense - net (2)
4.0
3.3
(9.1
)
Adjusted EBITDA
16.3
29.6
143.3
Depreciation expense
(9.0
)
(8.8
)
(35.2
)
Amortization of intangible assets
(0.1
)
(0.1
)
(0.3
)
Adjusted operating income
7.2
20.7
107.8
Restructuring expense
(1.5
)
(4.5
)
(6.8
)
Other non-recurring charges (1)
—
—
(3.1
)
Operating income
$
5.7
$
16.2
$
97.9
Adjusted EBITDA margin percentage
5.0
%
7.1
%
8.2
%
Adjusted operating income margin
percentage
2.2
%
5.0
%
6.2
%
(1)
Other non-recurring charges includes
losses from a long-term note receivable resulting from the 2014
divestiture of the Company’s Chinese joint venture and other
charges included in engineering, selling and administrative
expenses in the third and fourth quarter 2019.
(2)
Other (income) expense - net includes the
settlement of a legal matter recorded in the second quarter of
2019, along with net foreign currency losses, other components of
net periodic pension costs and other miscellaneous items recorded
in 2020 and 2019.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200507006133/en/
Ion Warner VP, Marketing and Investor Relations +1
414-760-4805
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